As Mexico’s Pena Nieto assumes presidency, stars align for him

When Enrique Pena Nieto assumes Mexico’s presidency this weekend, he’ll return the once-entrenched Institutional Revolutionary Party to power with a strong breeze at its back.

After years of lackluster growth, Mexico’s economy hums once again. A mood of compromise has set in among often-fractious political parties. And crime groups have cut down on the atrocities that gave the nation a black eye in recent years.

“He’s got the stars aligned in his favor,” said Jorge Zepeda Patterson, an economist and political analyst.

Five months after a triumph that was narrower than expected, the former state governor takes office Saturday. Behind his rise is the Institutional Revolutionary Party, known as the PRI, the political party that ruled Mexico with a colossal grip for 71 years until an election loss in the year 2000.

Never miss a local story.

Sign up today for a free 30 day free trial of unlimited digital access.

A party with sprawling tendencies, the PRI’s umbrella covers a disparate lot that ranges from technocratic modernizers to old guard nationalists who controlled the levers of power in what was once termed the “perfect dictatorship.”

Pena Nieto has set forth a broad reform agenda that could upend some of the cornerstones of previous PRI governments, such as opening the state Pemex oil company to outside investment and undertaking strong tax and fiscal reforms.

Some of Pena Nieto’s fiercest resistance may come from within his party.

“He has to be very careful with how he deals with the PRI governors, with the PRI unions, with the PRI old guard, and although he’s skillful and very intelligent . . . he’s going to have to take a lot of these people into account,” said Jorge G. Castaneda, a former foreign minister.

Mexico, however, is a different country than when the PRI last ruled. Civil society groups began to flourish over the past 12 years, the media has grown accustomed to freedom, and different branches of government are taking their roles more seriously.

Forces outside the party may help weaken resistance to reforms.

“Pena Nieto may become a democratizing force even without really wanting to be one,” said Zepeda, whose column appears on the sinembargo.mx news website.

When the PRI handed over the reins of the country in 2000, the strong presidentialist system in Mexico fractured. Under the center-right National Action Party, Mexico passed through a vacuum of power of sorts as legislators blocked initiatives, governors evolved into regional political kingpins, union bosses strengthened their fiefdoms and crime groups tore into one another.

Even monopolistic conglomerates – among them the telecommunications empire led by Carlos Slim, the world’s richest man – grew weary of a lack of clear rules.

“Groups of power in the country are increasingly in search of a kind of overall referee,” Zepeda said. “The feeling is that this mutual war between groups to fill the vacuum has started to generate inefficiencies. . . .”

“There is a feeling that we need . . . a more executive president. Even before Pena Nieto moves a finger, there is a favorable environment to push through changes.”

In a trip to Washington and Ottawa this week, Pena Nieto indicated he would broaden the international agenda beyond issues of security and migration to push for deeper economic integration in energy, trade and other areas.

“These days, if you add together all the energy reserves of Canada, the United States and Mexico, taking into account new methods of extraction, it is the most important energy region in the world,” said Emilio Lozoya Austin, 35, a Harvard-trained development expert who is touted as the likely next foreign secretary.

Even as Mexico looks northward, it also will look west to the Pacific Rim nations and south to the powerhouses in South America, he said.

“A stronger Latin America needs for Mexico and Brazil to be more united,” Lozoya said.

On the domestic front, Pena Nieto has laid out a series of ambitious pledges. Among them: raise Mexico’s annual economic growth rate to 6 percent a year, cut a soaring homicide rate in half, and build a 40,000-member paramilitary force (or gendarmerie) from scratch to fight organized crime.

Sent reeling by a global economic crisis that began in 2008, and a swine flu pandemic a year later, Mexico has had lackluster growth averaging 1.9 percent a year under President Felipe Calderon. But the economy is picking up steam and may tally growth above 3.5 percent this year.

A new Congress, which took office in September, already has moved on measures pushed by the Pena Nieto camp, enacting a labor reform that makes it easier to hire and fire workers, and limits cost of severance. Calderon signed the reform into law Thursday morning.

Legislators are also debating a Pena Nieto-backed proposal to shift a Cabinet-level ministry in charge of a 35,000-member federal police force under the Interior Ministry, centralizing efforts to combat crime. Separately, they are mulling creation of an autonomous National Anti-corruption Commission empowered to investigate all levels of government.

The unusual cooperation burst into headlines this week with news that the PRI, the National Action Party (known as PAN) and the left-wing Party of the Democratic Revolution (PRD) were hashing out a so-called Pact for Mexico to facilitate reforms, cognizant that Mexicans have grown weary of do-nothing legislatures.

The pact was to be signed Thursday, but sectors of the PRD backed out, saying they needed more time. Even if only the PAN and PRI join loosely together, they can rally enough votes to enact reforms. The incoming government is pleased.

The labor reform and other legislative cooperation “gives us a lot of confidence that agreements can be reached on matters very important to the Pena administration in terms of energy and fiscal policy,” Lozoya said. “These will be a priority in the first quarter of next year.”

Whether criminal narcotics gangs will allow Pena Nieto to focus on such issues is yet to be seen. Experts say he would certainly reframe security issues, dropping language about a “war” while working on everyday law-and-order issues.

“What can we do about the war on drugs? Put an end to it,” said Castaneda, indicating that the nation should try to control delinquency at manageable levels but give lower priority to crime gangs than Calderon’s high-decibel campaign.